Australian Federal Budget 2017 – How it impacts immigration

Overview

On 9 May 2017 Treasurer Scott Morrison handed down the 2017-18 Federal Budget which included announcements of a new ‘Skilling Australians Fund’ levy to support the new Temporary Skill Shortage visa from March 2018, increased visa application charges in line with inflation, limits on foreign investors intended to reduce pressure on housing affordability and the introduction of a new Temporary Parent visa from November 2017.  The release of the Budget followed the Government’s announcement in April that it would abolish the 457 temporary skilled visa programme in favour of a new Temporary Skills Shortage visa.

1.  A new training levy for employer sponsors

From March 2018, employers that sponsor foreign workers on the new Temporary Skill Shortage (TSS) visa and employer sponsored permanent skilled visas will be required to pay a levy which will provide revenue to the new ‘Skilling Australians Fund’. The levy will replace the training benchmarks which currently apply to the subclass 457 and permanent employer sponsored visa programs.

Businesses with turnover of less than $10 million per year will be required to make an upfront payment of $1,200 per visa per year for each employee on a temporary visa and a one-off payment of $3,000 for each employee nominated for a permanent residence on a Employer Nomination Scheme (subclass 186) visa (ENS) or a Regional Sponsored Migration Scheme (subclass 187) visa (RSMS).

Businesses with turnover of $10 million or more per year will be required to make an upfront payment of $1,800 per visa per year for each employee on a temporary visa and make a one-off payment of $5,000 for each employee nominated for an ENS visa or a RSMS visa.  Base visa application charges (primary applicant charge) for the TSS visa will be set at A$1,150 for short-term (two-year) visas and at A$2,400 for medium-term (four-year) visas.

The changes will raise costs for employers that intend to sponsor or nominate foreign workers for TSS visas or for the permanent ENS and RSMS visas from March 2018. The abolishment of the Subclass 457 visa and introduction of the TSS visas will also have an impact on the ability of companies to recruit and hire foreign skilled workers from March 2018, as TSS visas are expected to have more restrictive application requirements.

This measure is estimated to bring $1.2 billion in revenue over the next four years, which will be used to support the training and development of Australian workers.

2.  Increases to Visa Application Charges from 1 July 2017

The Federal Budget includes modest increases to Visa Application Charges (VAC) for a number of Australian visa subclasses, including the following:

Visa Subclass Name Visa Application Charge Visa Application Charge
Pre-1 July 2017 Post 1 July 2017
Primary Applicant Depend.     >18 yrs Depend.          < 18 yrs Primary Applicant Depend. >18 yrs Depend. >18 yrs
600 Visitor Visa – ADS, Business, Sponsored Family, Tourist A$340 N/A N/A A$345 N/A N/A
Work Visas
400 Temporary Work (Short Stay) $275 $275 $70 $280 $280 $70
407 Training Visa $275 $275 $70 $280 $280 $70
408 Temporary Activity Visa $275 $275 $70 $280 $280 $70
457 Temporary Work (Skilled) $1,060 $1,060 $265 $1,080 $1,080 $270
186 Employer Nomination Scheme $3,600 $1,800 $900 $3,670 $1,835 $920
187 Regional Sponsored Migration Scheme $3,600 $1,800 $900 $3,670 $1,835 $920
189 Skilled – Independent $3,600 $1,800 $900 $3,670 $1,835 $920
190 Skilled – Nominated $3,600 $1,800 $900 $3,670 $1,835 $920
188 Business Innovation $4,780 $2,390 $1,195 $4,875 $2,440 $1,220
TSS Visa – Short Term (from March 2018) $1,155 $1,155 $290
TSS Visa – Long Term (from March 2018) $2,400 $2,400 $600
Family Visas
801/100 Partner Visa $6,865 $3,435 $1,720 $7,000 $3,505 $1,755
143 / 864 Contributory Parent $3,695 $1,845 $925 $3,770 $1,880 $945
202 Temporary Parent – 3 years validity  (from Nov 2017) $5,000
202 Temporary Parent – 3 years validity  (from Nov 2017) $10,000

 

From 1 July 2017, all VAC will be increased annually in accordance with the forecast Consumer Price Index (CPI). Indexation will not apply to 2nd instalment VACs.

The DIBP Visa Price Increase Fact Sheet provides a full list of the revised VAC pricing (with indexation applied) effective 1 July 2017.

3. New Community Support Programme for employer-supported humanitarian visas

Australia’s Humanitarian Programme will be expanded to offer 16,250 places in 2017-18 and to 18,750 places in 2018-19.

From 1 July 2017, the Government will allocate up to 1,000 places from the Humanitarian Programme to a new Community Support Programme.  The Community Support Programme enables businesses to sponsor humanitarian entrants to Australia where the business is prepared to support the applicant during their first year in Australia, fund their visa application, airfares and settlement services, and refunding any working age payments made to the humanitarian entrant.

Our friends at Refugee Talent, a digital platform connecting skilled refugees with companies offering short- and long-term job opportunities, are already working to create pathways for businesses to be connected with highly skilled refugees to migrate to Australia under this program.

4. New Temporary Parent Visa

From November 2017 the Government will introduce a new temporary sponsored parent visa for parents of Australian citizens, Australian permanent residents and eligible New Zealand citizens to stay in Australia for a maximum period of 10 years.

15,000 visas will be available annually for the new Temporary Parent visa whereby applicants will be able to seek:

  • a three-year visa for $5,000 or
  • a five-year visa for $10,000, with the opportunity of a single renewal for another five years at $10,000.

This new visa will bring an estimated gain of $99.0 million to the Budget.

The sponsoring Australian child will have legal liability for public health expenditure (including aged care arrangements) incurred by the visa holder in Australia. Existing contributory and non-contributory parent visas will remain open to new applicants.

5. Limits on Foreign Investors

Limits on foreign ownership in new developments will be introduced to help reduce pressure on housing affordability, with foreign ownership of new developments capped at 50 per cent.

Foreign owners who buy residential property and leave it vacant will be subject to an annual $5,000 Foreign Investors Tax levy. Foreign property owners will also be required to pay the capital gains tax when they sell their main residence.

6. Other Impacts for Permanent Visa Holders

From 1 July 2018, a person will be required to have 15 years of continuous Australian residence before being eligible to receive the Age Pension or Disability Support Pension.

Australian permanent residents and most New Zealand citizens will no longer be able to apply for Commonwealth supported university places, meaning they will have to pay full fees for degrees (they can still take out concessional HELP loans).

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